Copper subdued as Fed outlook weighs, tin retreats

Copper prices dipped in Asian trading on Wednesday, as traders assessed the prospects of further interest rate hikes by the US Federal Reserve, while tin retreated after a rally that had been boosted by concerns over supply from Myanmar.

Three-month copper on the London Metal Exchange was down 0.9% at $8,936 a tonne, as of 0707 GMT.

The most-traded May copper contract on the Shanghai Futures Exchange ended daytime trade 0.2% lower at 69,470 yuan ($10,083.61) a tonne.

The Fed should continue raising rates after recent data showed inflation remains persistent while the broader economy seemed poised to continue growing, even if slowly, St. Louis Federal Reserve President James Bullard told Reuters.

“Investors now hope that the Fed will give a clearer stance on the outlook for future monetary policy,” Huatai Futures analysts said in a note. Markets are pricing an 86% chance the Fed raises rates by 25 basis points at its meeting in May.

“As the interest rate meeting is approaching, the US dollar may still have a chance to strengthen in a short period of time, which may put pressure on the non-ferrous sector to a certain extent,” Huatai analysts said.

A firm dollar dents the appeal of greenback-priced metals.

The dollar steadied on Wednesday as investors scrutinised US economic indicators, Fed commentary and corporate earnings for clues about the path for interest rates.

Copper gains after strong Chinese growth data

Benchmark LME tin was down 1.7% at $27,360 a tonne, while Shanghai tin shed 1.5% to 219,030 yuan a tonne, after both scaled 11-week peaks in the previous session.

A suspension of mining in Myanmar could lead to further tightening of global supplies of tin, China’s Yunnan Tin , the world’s top refined tin producer, said on Tuesday.

LME aluminium dropped 0.9% to $2,414 a tonne, zinc shed 0.9% to $2,846.50, lead dipped 0.1% to $2,142, while nickel was little changed at $25,628 a tonne.

SHFE aluminium rose 0.8% to 19,025 yuan a tonne, nickel climbed 4.2% to 195,910 yuan, zinc steadied at 22,330 yuan, and lead added 0.5% to 15,405 yuan.